ca inter suggested answers | Nov 23 Tax Paper
Table of Content
Mr. Pramod, a resident aged 55 years, is a retail trader; he furnishes the following information for A Y 2023-24:
Trading and Profit and Loss Account for the vear ended on 31.03.2023 :
| ₹ | ₹ | ||
| Opening Stock | 1,15,000 | Sales | 70,80,000 |
| Purchases | 55,40,000 | Closing Stock | 2,10,000 |
| Transport charges | 1,20,000 | ||
| Gross Profit c/f | 15,15,000 | ||
| 72,90,000 | 72,90,000 | ||
| Salaries | 3,40,000 | Gross Profit b/f | 15,15,000 |
| Rates and Taxes | 24,000 | Rent from H. Property | 1,80,000 |
| Administrative Expenses | 3,25,000 | Rent from furniture | 1,20,000 |
| Depreciation | 80,000 | ||
| Net Profit | 10,46,000 | ||
| 18,15,000 | 18,15,000 |
(1) All the sales are by account payee cheques or through bank transfers.
(2) The opening and closing stocks have been over valued by ₹15,000 and ₹20,000 respectively.
(3) Rates and taxes include GST liability of ₹5,000 paid on 01.05.2023 and municipalktaxes for let out property ₹7,000.
(4) Administrative expenses include ₹25,000 paid as donation to National Childrens’ Fund, and a payment for laptop purchased on 15.05.2022 for ₹60,000 through bank transfer.
(5) Transport charges include ₹30,000 paid in cash on 01.09.2022.
(6) He incurred a loss of ₹8,000 on sale of equity shares on 10. 03 2023, which were purchased on 10.06.2022.
(7) Depreciation includes ₹1,200 as depreciation on Trade Marks wrongly charged at 15%.
(8) He deposited ₹50,000 in PPF a/c and has paid life insurance premium ₹60,000.
(9) He paid interest of ₹70,000 on loan availed in FY 2017 - 18 for higher education of his wife.
Compute the total income and the income tax payable by Mr. Pramod for AY 2023-24, if,
(i) The business profit is computed as per normal provisions and he opts for Section 115BAC.
(ii) He opts to compute business profit under presumptive taxation under Section 44AD and does not opt for Section 115 BAC
(iii) The business profit is computed as per normal provisions of Incometax Act and he does not opt for Section 115BAC.
Which option is advantageous to Mr. Pramod ?
Answer 1 :
COMING SOON
State (Yes/No) whether the following transactions can be treated as income deemed to accrue or arise in India :
(1) Hire charges paid outside India for the use of machinery situated in India.
(2) Income of a non-resident and non-citizen of India from the shooting of cinematograph film in India.
(3) Capital gain arising through a transfer of a house property situated in India, the place of registration and the place of payment of consideration being outside India.
(4) Allowances paid by the Government to a citizen of India for the services rendered outside India.
(5) Past period foreign untaxed income brought to India during the previous year.
(6) Gift received by a non-resident on the occasion of his wedding in India.
Answer 2 : (A)
COMING SOON
Mr. Sanjay has following incomes during the previous year 2022-23 :
(1) Interest on England Development Bonds (1/3 received in India) ₹60,000.
(2) Interest received from a non-resident ₹5,000 against a loan given to him to run a business in India.
(3) Royalty received from Akhil, a resident, for technical services given to run a business outside India ₹20,000.
(4) Income from business in Sri Lanka ₹25,000 out of which ₹15,000 were received in India. The business is controlled from India.
Compute taxable income of Mr. Sanjay for the assessment year 2023- 24 if he is a
(i) Not ordinarily resident
(ii) Non resident
Answer 2 : (B)
COMING SOON
Discuss the liability of tax deduction at source under the Income Tax Act 1961 in respect of the following cases with reference to AY 2023- 24. (State applicable provision and give brief reasons for your answer, wherever applicable)
(i) XYZ, a resident partnership firm is in retail business buying fabric material regularly from ABC, a resident proprietorship firm. Details of transactions during PY 2022-23 are as given:
| Particulars | Date of payment | Amt (₹) |
| Advance payment | 1.4.2022 | 40,00,000 |
| Payment for supplies | 2.7.2022 | 20,00,000 |
| Advance payment | 4.8.2022 | 12,00,000 |
XYZ achieved gross turnover of ₹12 crore from the business during the financial year 2021-22 and the gross business turnover for financial year 2022-23 turns out to be ₹9 crores. Gross business turnover of ABC for the financial year 2021-22 was ₹6 crores.
Will your answer be same, if the gross turnover of XYZ during the financial year 2021-22 includes ₹4 crore towards supply of material for charitable purposes ?
(ii) MJ, a part time director of ABZ Pvt. Ltd. was paid an amount of ₹2,49,000 as commission on sales (which was not in the nature of Salary) for the period 01.04.2022 to 31.03.2023.
(iii) Mr. Kumar, a resident senior citizen, aged 86 years, is a retired State Govt. employee. He gets pension of ₹72,000 p.m. He has his saving account with Bank of Baroda, a bank notified by the Central Govt. u/s 194P, has received the interest on saving account ₹15,000 during the P.Y. 2022-23. His pension is also credited in this account. In the same bank he has deposited ₹10 Lakh in a Term Deposit @ 7% simple interest on 01.07.2022. He has no other income. He has not opted Section 115BAC. Discuss requirement of filing of income tax return also.
Answer 2 : (C)
COMING SOON
Mr. Aryan, A Resident Individual aged 58 years, sells (unlisted) shares in a private sector company on May 17, 2022 for ₹10,00,000. The shares were bought on 01.08.2012 for a consideration of ₹2,00,000. Mr Aryan paid ₹2,000 as brokerage on sale of shares.
Mr. Aryan deposited ₹5,00,000/- in Capital Gain Account scheme on 15.06.2023 (Before filing the return of Income for the Assessment Year 2023-24).
On April 30,2024 he withdraws ₹4,50,000 and purchases a residential house properly at Delhi on May 1,2024 for ₹4,50,000.
Cost Inflation Index (CII)— F Y 2012-13 — 200, F Y 2022-23 —331.
Ascertain
(i) The amount of Capital Gain chargeable to tax for the AY 2023-24.
(ii) Tax treatment (with mention of relevant assessment year) of the unutilized amount.
Answer 3 : (A)
COMING SOON
Ms. Neelima, a resident of Delhi, was employed by LMN Ltd. upto 15 March, 1992. At the time of leaving LMN Ltd., she was paid ₹3,50,000 as leave salary out of which ₹59,000 was exempted from tax under section 10(10AA)
Thereafter, she joined CD (P) Ltd. and received ₹4,14,000 as leave salary at the time of retirement on December 31, 2022. In addition she received a gratuity of ₹12,00,000 from the employer (she is not covered by the Payment of Gratuity Act, 1972). The following information is available :
Average salary received during 11 months ending on December 31, 2022
| From February 1 to July 31 (p.m.) | ₹22,600 |
| From August 1 to December 31 (p.m.) | ₹22,900 |
| Duration of service | 14 years 7 months |
| Leave entitlement for every year of service | 45 days |
| Leave availed while in service | 90 days |
| Leave at her credit at the time of retirement | 18 months |
She received ₹5,20,000 from unrecognized provident fund of which she was a member (This constitutes employee’s contribution ₹200,000; employer’s contribution ₹2,10,000; interest on employee’s contribution ₹60,000; interest on employer’s contribution ₹50,000).
You are required to compute her total income for the assessment year 2023-24, clearly showing all workings. (Ignore sec 115BAC provisions).
Answer 3 : (B)
COMING SOON
From the following calculate the taxable amount under the proper head of income for the Financial Year 2022-23 of Mr L, who is resident and 56 years old. The reasons should form part of your answer
(i) Dividend of ₹50,000 received in April 2022. The dividend was declared by the company- LMN Limited at its annual general meeting held in October 2021.
(ii) Advance forfeited amounting to ₹1,00,000 on 01.05.2022 as the negotiation for transfer of capital asset did not result in transfer of Capital Asset.
(iii) Cash Gift received from non-relative on the occasion of marriage of Son. ₹51,000.
(iv) During the Financial Year 2022-23, he received ₹99,000 as pension from employer of deceased wife.
Answer 3 : (C)
COMING SOON
M. Jai, a resident individual furnishes the following particulars of his income and other details for the previous year 2022-23 :
| ₹ | |
| Income from the activity of owning and maintaining race horses | 40,000 |
| Income from crossword puzzle solving | 30,000 |
| Income from Agricultural land in Haryana | 25,000 |
| Dividend Income from domestic company (gross) | 15,000 |
| (Expenditure incurred in collecting the aforesaid dividend) | 2,500 |
| Income from cycling business | 1,50,000 |
| Loss from warehousing facility for storage of edible oils | 1,00,000 |
| Share of loss from PR associates, a firm (having 4 equal partners) in which he is a partner | 23,000 |
| The following items have been brought forward from the assessment year 2020-21: | |
| Brought forward loss from house property | 1,00,000 |
| Loss from the activity of owning and maintaining race horses | 37,000 |
| Loss from gambling | 10,000 |
| Unabsorbed depreciation | 15,000 |
| Speculation Loss | 20,000 |
Mrs. Jai (wife of Mr Jai) got a salary of ₹1,20,000 from PR associates during the year 2022-23. She is not qualified for the job.
Compute the gross total income of Mr Jai for the assessment year 2023-24 ignoring the provisions of section 115BAC.
Answer 4 : (A)
COMING SOON
Mr. Suraj, an Indian citizen, gives the following details of his income and expenses during the year 2022-23 :
| ₹ | |
| Income from profession | 11,70,000 |
| Winnings from lottery | 70,000 |
| Contribution to ULIP 1971 plan for spouse | 70,000 |
| Cheque donation to National Defence Fund | 60,000 |
| Cheque donation to Government for promoting family planning | 35,000 |
| Cheque donation to approved public charitable institute | 1,20,000 |
Compute the deduction under section 80G allowable to him for the assessment year 2023-24.
Answer 4 : (B)
COMING SOON
Explain the provisions of Tax Collection at source for overseas remittance by an authorized dealer. Also enumerate the rate of tax to be collected and the amount on which no tax is to be collected.
Answer 4 : (C)
COMING SOON
OR
In the context of Tax Return Preparer scheme, 2006, explain the following:
(i) Eligible Persons
(ii) Educational Qualifications of Tax Return Preparer
(iii) Persons not entitled to act as return preparer
Answer 4 : (C)
COMING SOON
miss nitya proprietor of Ms. Honest enterprise a registered supplier of taxable goods and services in the state of west bengal pays GST under regular scheme. it is not eligible for any threshold exemption. It provided the following information for the month of December 2022 :
| S.NO. | PARTICULARS | AMOUNT (₹) |
| OUTWARD SUPPLY | ||
| i. | Intra-state supply of goods to M/s. Natural & Sons | 7,00,000 |
| ii. | Intra-state transfer of goods to its branch office in the state of West Bengal. Both places are under the same GSTIN. | 1,00,000 |
| iii. | Provided inter-state supply of sponsorship service to XYZ Ltd of Chennai | 80,000 |
| iv. | Advance received for future supply of management consultancy service to Mr. Sharad (Intra-state supply) | 40,000 |
| INWARD SUPPLY: (Intra-state ) | ||
| i. | Purchase of taxable goods from registered suppliers. | 8,00,000 |
| ii. | Availed Works Contract service for repair of office building. Amount of repair was debited in the profit & loss account. | 30,000 |
| iii. | Availed legal service from an advocate to represent the matter in the Court relating to collection of disputed proceed from customers. | 50,000 |
Notes :
(i) Rate of CGST, SGST and IGST on all supplies are as below:
| Particulars | CGST | SGST | IGST |
| Goods | 2.5% | 2.5% | 5% |
| Supply of services | 9% | 9% | 18% |
(ii) Both inward and outward supplies given above are exclusive of taxes.
(iii) All the conditions necessary for availing the ITC have been fulfilled.
(iv) Working note should form part of the answer.
Compute the net minimum GST payable in cash by M/s. Honest Enterprise for the month of December 2022.
Answer 5 :
COMING SOON
Mr. Dhanwan, an individual registered supplier of Ahmedabad (Gujarat), received the following amount towards rendering of the intra-state supply of various services in the month of January 2023 :
| S.NO. | PARTICULARS | Amount (₹) |
| i. | Consideration received from security and housekeeping services provided to ‘“Holy Foundation”, an educational institution providing services by way of pre-school education, outside the school premises on its annual day function. | 60,000 |
| ii. | Amount received as an honorarium for participation as guest anchor on “Apna TV” in relation to a debate. | 2,25,000 |
| iii. | Sum received as hiring cinarges for provision of non-air conditioned contract carriage for transportation of employees to and from the work to M/s. Siddhi Pvt. Ltd, a registered person under the GST. Such hiring is for 3 months. Use of the contract carriage is at the disposal of the company. | 1,50,000 |
| iv. | Amount received from provision of training in recreation activities of music. | 90,000 |
| v. | Renting of residential flat to Mr. Sahil proprietor of M/s. Dayaram & Sons, a registered person under GST for the purpose of his own residence (in personal capacity) | 30,000 |
You are required to compute the value of supply on which GST is to be paid by Mr. Dhanwan for the month of January 2023, All the amount stated above are exclusive of GST, wherever applicable.
Suitable notes should form part of the answer.
Answer 6 : (A)
COMING SOON
Examine whether the following activities would be treated as 25 supply under GST law ?
(i) Mr. Sonu from Chandigarh purchased a water cooler from Malhotra Bros. of Hoshiarpur for ₹ 25,000 to donate it to a temple situated in Hoshiarpur. Mr. Sonu directed Malhotra Bros. to engrave the words on the water cooler- “Donated by Mr. Sonu from Chandigarh” and dispatch the water cooler directly to the temple.
(ii) Wesco Ltd. a registered person in Ahmedabad (Gujarat) having head office located in Singapore, received management consultancy services free of cost from its head office .
Answer 6 : (B)
COMING SOON
Mr. Venaram proprietor of M/s. Lalit Kirana Stores is registered a composition dealer in the Jodhpur'district of Rajasthan. He has not furnished the statement for payment of self-assessment tax in the form GST CMP-08 for two consecutive quarters. He placed an order for purchase of taxable goods worth ₹5,50,000 with M/s. Bob & Sons (a partnership firm), a registered dealer in the Bikaner district of Rajasthan. M/s. Bob & Sons has been regularly filing its GST returns. M/s. Bob & Sons wants to generate E-way bill with respect to intrastate supply to be made to M/s. Lalit Kirana Stores. Whether M/s. Bob & Sons is allowed to generate E-way bill as per the provisions of CGST Act, 2017 ? Answer with proper reasoning.
Answer 7: (A)
COMING SOON
Dream World Pvt. Ltd is registered under GST in the State of Haryana. During the Financial Year 2022-23 its annual aggregate turnover was ₹12 Crore. In the month of April 2023, it supplied goods worth ₹12 Lakh to Nightmare Ltd (a registered taxable person).
(i) You are required to ascertain whether issue of e-invoice is mandatory in respect of this transaction ?
(i) What would be your answer if Nightmare Ltd is a SEZ (Special Economic Zone) unit ?
Answer 7: (B)
COMING SOON
Mr. Atul of Chennai is a registered dealer under GST. He has an opening balance of input tax credit of 1,20,000 (IGST) lying in the electronic credit ledger relating to the month of November, 2022 During the month, a legal proceeding has been initiated under the GST law which resulted in a tax liability of ₹80,000 (IGST, other than RCM liability). Mr. Atul agrees with the tax liability and wants to use the balarice lying in the electronic credit ledger towards payment of same.
He seeks your opinion with regard to the provisions of GST laws as to whether he is allowed to use the amount lying in the electronic credit ledger for making the payment of tax liability, payable as a consequence of the proceeding ?
Answer 7: (C)
COMING SOON
Briefly explain the provisions relating to reversal of input tax credit in case of non-payment of tax by the supplier and re-availment thereof ?
Answer 8: (A)
COMING SOON
OR
Explain the procedure for revocation of cancellation of registration where the registration of a person is cancelled suo-motu by the proper officer as per the provisions of CGST Act, 2017.
Answer 8: (A)
COMING SOON
Mr. Sameer a registered person under GST, is unable to file GSTR-1, reason being showed that tax payable under GSTR-1 which has been filed in respect of last tax period exceeds the tax payable under GSTR- 3B which has been filed for the corresponding tax period. Explain the procedure to be followed by the department and Mr. Sameer for the same as per the provisions of Rule 88C of the CGST Rules 2017.
Answer 8: (B)
COMING SOON
Ruchika Saboo
An All India Ranker (AIR 7 - CA Finals, AIR 43 - CA Inter), she is one of those teachers who just loved studying as a student. Aims to bring the same drive in her students.
Ruchika Ma'am has been a meritorious student throughout her student life. She is one of those who did not study from exam point of view or out of fear but because of the fact that she JUST LOVED STUDYING. When she says - love what you study, it has a deeper meaning.
She believes - "When you study, you get wise, you obtain knowledge. A knowledge that helps you in real life, in solving problems, finding opportunities. Implement what you study". She has a huge affinity for the Law Subject in particular and always encourages student to - "STUDY FROM THE BARE ACT, MAKE YOUR OWN INTERPRETATIONS". A rare practice that you will find in her video lectures as well.
She specializes in theory subjects - Law and Auditing.
Yashvardhan Saboo
A Story teller, passionate for simplifying complexities, techie. Perfectionist by heart, he is the founder of - Konceptca.
Yash Sir (As students call him fondly) is not a teacher per se. He is a story teller who specializes in simplifying things, connecting the dots and building a story behind everything he teaches. A firm believer of Real Teaching, according to him - "Real Teaching is not teaching standard methods but giving the power to students to develop his own methods".
He cleared his CA Finals in May 2011 and has been into teaching since. He started teaching CA, CS, 11th, 12th, B.Com, M.Com students in an offline mode until 2016 when Konceptca was launched. One of the pioneers in Online Education, he believes in providing a learning experience which is NEAT, SMOOTH and AFFORDABLE.
He specializes in practical subjects – Accounting, Costing, Taxation, Financial Management. With over 12 years of teaching experience (Online as well as Offline), he SURELY KNOWS IT ALL.
"Koncept perfectly justifies what it sounds, i.e, your concepts are meant to be cleared if you are a Konceptian. My experience with Koncept was amazing. The most striking experience that I went through was the the way Yash sir and Ruchika ma'am taught us in the lectures, making it very interesting and lucid. Another great feature of Koncept is that you get mentor calls which I think drives you to stay motivated and be disciplined. And of course it goes without saying that Yash sir has always been like a friend to me, giving me genuine guidance whenever I was in need. So once again I want to thank Koncept Education for all their efforts."
"Hello everyone, I am Kaushik Prajapati. I recently passed my CA Foundation Dec 23 exam in first attempt, That's possible only of proper guidance given by Yash sir and Ruchika ma'am. Koncept App provide me a video lectures, Notes and best thing about it is question bank. It contains PYP, RTP, MTP with soloution that help me easily score better marks in my exam. I really appericiate to Koncept team and I thankful to Koncept team."
"Hi. My name is Arka Das. I have cleared my CMA Foundation Exam. I cleared my 12th Board Exam from Bengali Medium and I had a very big language problem. Koncept Education has helped me a lot to overcome my language barrier. Their live sessions are really helpful. They have cleared my basic concepts. I think its a phenomenal app."
"I cleared my foundation examination in very first attempt with good marks in practical subject as well as theoretical subject this can be possible only because of koncept Education and the guidance that Yash sir has provide me, Thank you."
